Tron founder Justin Sun is seeking sanctions against Trump-linked World Liberty Financial and its lawyers, accusing them of concealing the company's United Arab Emirates citizenship from a California federal court in an initial ownership filing. Sun announced the motion on November 3 in a post on X, months into his lawsuit over $45 million in frozen WLFI tokens. He plans to refile the case in California state court once the sanctions motion is resolved.

Sun Challenges World Liberty's Ownership Disclosure

According to Sun, he agreed to buy $30 million in WLFI tokens in November 2024 and later raised his investment to $45 million, making him one of World Liberty's earliest and largest investors. In April, he sued the company in federal court, alleging fraud and the unlawful freezing of his tokens. His purchase agreement allowed claims in California state or federal court, and he chose the federal venue.

Sun said federal diversity rules require the parties to hold different citizenships, and that a company takes on the citizenship of its owners for this purpose. Federal courts can hear such cases only when that diversity exists, which makes the ownership disclosure the factual foundation of Sun's chosen venue. World Liberty's initial disclosure, however, listed only itself, naming Florida as its sole citizenship. Its lawyers certified that they knew of no other owners requiring disclosure, Sun said.

UAE Ownership Surfaced After August Hearing

World Liberty sought to move the dispute into private arbitration, a request Sun opposed. He said his lawyers spent months and hundreds of thousands of dollars fighting the effort. At an August hearing, the court ruled that some claims should remain in open court while others proceed to arbitration.

Less than a week later, World Liberty amended its ownership disclosure, identifying 22 members in its ownership chain. The revised filing listed Florida, Delaware, Puerto Rico, and the UAE, according to Sun. World Liberty now argues that the federal court lacks jurisdiction over the case because both sides include foreign parties — the same citizenship details Sun cites as evidence of a misleading filing.

Refiling Plans and Countersuit

Sun said World Liberty's lawyers claimed they learned of the UAE citizenship only after filing the original disclosure. He argued that they either failed to check properly or were given incomplete information by the company, and said World Liberty refused to explain the omission.

His motion seeks sanctions — penalties a court can impose for misconduct in litigation — against the company and its lawyers over what he calls a misleading court filing. Sun also cited World Liberty's public description of itself as an American, tax-paying corporation that was not organized offshore.

World Liberty countersued Sun in May, calling his claims a "meritless PR stunt." The company previously defended its decision to freeze his tokens and could not be reached for comment on the latest allegations. Sun said he will refile in California state court after the sanctions motion is resolved — a venue his purchase agreement allowed.

Source: Cryptofrontnews